Tianjin City launches $17.4bn fund

The fund will support the growth of industries including high-end manufacturing, IT, aerospace, new energy, new materials, pharmaceuticals and internet-related services.

Tianjin’s municipal government has launched the Tianjin Haihe Industry Fund, a RMB120bn ($17.4bn) government guidance fund, DealStreetAsia reported on Tuesday.

The fund, which has been seeded with RMB20bn from the city budget, aims to raise an additional RMB100bn in private capital that will be deployed in various subsidiary funds targeting several sectors. It is hoped these subsidiary funds will raise additional private capital up to RMB500bn.

One of the limited partners (LPs) in the fund is Chinese fabless semiconductor maker Tsinghua Unigroup, a subsidiary of state-owned conglomerate Tsinghua Holdings that in turn is funded by Tsinghua University.

Other LPs include financial services firm China Minsheng Bank, consumer electronics and home appliance maker Haier, conglomerate China Oceanwide and Hony Capital, the private equity arm of conglomerate Legend Holdings, as well as private equity firm ChinaEquity Group.

Three of China’s big four commercial banks, Bank of China, China Construction Bank and Industrial and Commercial Bank of China have also agreed to provide RMB100bn in capital support, though whether this comes in the form of loans, bonds or venture debt is unclear.

The fund’s target industries include high-end manufacturing, IT, aerospace, new energy, new materials, pharmaceuticals and internet-related services.

Wang Jinhong, chairman of the fund management firm overseeing the Tianjin Haihe Industry Fund, said: “The most important point about government guidance funds is that its pursuit must be integrated with those of the market.

“Some government guidance funds that cannot deploy their capital because their pursuits do not meet those of the market. My biggest ambition is to realise government targets via market operations.”

See more from this Government Report: People's Republic of China

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